According to virtual money industry officials, the Korea Blockchain Association, a private body formed by 27 domestic exchanges, has lost 15 members and eight others are expected to follow suit because they cannot attract new clients. The 15 exchanges have an estimated one million clients.

The withdrawal raised concerns that South Korea's virtual currency market would be split into two groups -- four major exchanges and a minor group of seceders who will give up voluntary guidelines. The four major exchanges are UPbit, Bithumb, Coinone and Korbit.

South Korea's virtual money market has been down in the doldrums this week due to a crackdown, tightened regulations at home and abroad, a free fall in prices, and concerns about hacking that dampened sentiment among investors.

Since a customer identification system was introduced on January 30,
banks have been reluctant to provide virtual accounts to small exchanges. The new system allows only real-name accounts used for deposits and withdrawals in cryptocurrency trading.